The Cleveland and George Gund Foundations Respond to Economic Crisis

I received e-mail announcements from The Cleveland Foundation and the George Gund Foundation regarding how they are responding to the economic situation.  I am reprinting those e-mails here in their entirety:

From The Cleveland Foundation (1/7/09):

With the current economic crisis, we have seen an increased demand at agencies that address basic human needs such as food, shelter, and medical services. We remain committed to helping those agencies that improve people's daily lives. We also remain committed to long-term, overarching initiatives that have the potential to restructure our city, giving us new jobs, high-quality schools, and livable neighborhoods, among other benefits.
 
We have taken several steps to ensure our grantmaking dollars have the greatest impact. To have the resources to respond appropriately to our community's immediate needs, our board has deferred our major capital grants program, which usually runs in the spring. They will reconsider in June whether to run this program in 2009.  
 
The Ohio Grantmakers Forum is hosting an event (How Cleveland funders are responding to the economic crisis. 8:30 - 10 a.m. Feb. 2, 2009. Steven A. Minter Conference Center, 1422 Euclid Ave., 12th floor. Please RSVP to Mary Clare Donnellyby Jan. 28.) to discuss the impact the economy is having on grantmaking in our region, and we encourage you to attend. Remember, we are all in this together and the value of partnerships multiplies in these difficult times. 

Sincerely,
Robert E. Eckardt, Dr. PH
Senior Vice President for Programs and Evaluation

From the George Gund Foundation (1/8/09):

The start of a new year always brings a sense of hope, but the beginning of 2009 is also shadowed by apprehension about the economy.  No one can accurately predict the economy's future but we must adapt as best we can while also maximizing our contribution to an eventual turnaround.

The stock market collapse has affected almost everyone, including The George Gund Foundation.  The Foundation has lost almost one-third of its value, necessitating changes in our approach.  We believe it is essential that our grantees understand how we are planning to adjust to the constraints on our resources and what this may mean to them.  We have adopted several principles to guide us that we think it is important to share.

First, we have reduced our operating budget.  Every dollar we spend on operations is one that we cannot give away, so we have tightened our belts in several ways.  For example, this year we will issue an online annual report instead of a printed version.  We have cut our travel expenditures and will curtail staff travel to out-of-town meetings and conferences in the coming year.  

We intend to increase the percentage of our assets that we give away.  Federal tax law requires that we spend 5% of our assets every year, and we always exceed that minimum.  But in 2009 we will go substantially beyond that. However, because our portfolio is diminished, the dollars available for grants still will likely decline in 2009.  Thus, we do not expect to make any large new commitments.  In recent years we have made numerous substantial, multi-year grants to important community projects in Cleveland.  We will, of course, honor those commitments but doing so automatically imposes a constraint on our ability to consider new awards of similar magnitude.

Some foundations have rules against providing unrestricted operating support to grantees, but we believe that operating grants are important because they provide maximum flexibility to the nonprofit agencies that are doing the important work we want to see accomplished.  Through our various program areas, we will continue to work with grantees to provide operating support if possible.  But it is likely that we will be unable to help as many groups as in the past, and this support may be at reduced levels.

Nonprofit organizations fulfill an essential role in our society by helping people through difficult periods.  One key attribute of organizations that we will continue to support is the ability to play that role by identifying and executing innovative collaborations.  Tough times demand an ever greater focus on such shared undertakings, and we will work with many grantees to discover and pursue collaborations in the year ahead. 

The Gund Foundation has long supported grantees who advocate for public policies that advance our city-centric goals.  Every grantee - indeed every citizen - ought to engage in policy debate and advocacy.  Whatever the circumstances of the moment, opportunities for impact abound.  This is particularly true in a difficult economy because government's role is magnified, and successfully influencing that role tremendously leverages the Foundation's investments.  So, we are going to work even harder to identify policy support grants that are strategically targeted and to direct grantees to resources that will help them in this area.

Finally, we want to maintain open communication with you.  This is an uncertain time for everyone, and we will do everything we can to minimize that uncertainty.  Please do not hesitate to contact anyone on the Foundation's program staff with questions and concerns.

--Cindy Bailie